Abstract

The purpose of this paper is to examine small- to medium-sized enterprises (SMEs) partnerships and co-operation utilization within innovation processes. Industrial firms are gaining ideas for innovation from various sources and their innovative performance depends, besides their internal knowledge resources, also on how successful they are at appropriating knowledge from external sources. This seems to be true also with smaller, low tech and remote firms. According to analysis of Finnish data small low tech companies have a growth oriented innovation activity. The main findings from Finnish cases show that when the renewal is important at the firm level only, cooperation with business partners (consultants, suppliers) is emphasized; however, when the renewal is important at market level then the public sector cooperation with universities etc. is emphasized. 25% of the studied companies had university co-operation. Informal co-operation and short-term education was seen the most important forms of co-operation. The study of SME innovation in Eastern Finland is included in which implemented innovations during 2003?2005 were investigated. This paper is based on a quantitative study of a sample of SMEs located in the Eastern Finland region in Finland. The entrepreneurs completed a research questionnaire which was sent to 3226 entrepreneurs. 381 completed answers were received and the response rate was modest 11,8%, the final analyzed data contains 370 completed answers. The results suggest that the largest backlog appears to be in utilizing universities and public research organizations. The choices of knowledge sources can be attributed to different capabilities of firms and network partners (consumers, universities etc.) in creating and utilizing (exploitation and exploration) respective innovation-enhancing knowledge. Universities and consulting firms also need to exploit new knowledge created in science, practice and by end-users. This means a challenge for universities and other actors to develop their services and capabilities to meet the needs of SMEs and the manner of SMEs to implement innovation processes hand in hand with daily business.

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